Nigel Slack, author from the Operations Advantage, discusses several techniques to acquire a successful operations strategy
There is a common misunderstanding about operations strategy: it serves to employ the selections passed on by whoever is formulating business strategy. Although implementing business strategy top-down is but one natural part of operations strategy, it is merely one among four elements that should be present or no operations approach is to be effective. These elements are illustrated in the diagram below.
These elements is often a necessary condition to produce a truly strategic operation. These four elements (or perspectives) on operations strategy are discussed in detail below.
Top-Down: Operations must directly reflect the business’ overall strategy
Operations is but one amongst many functions that must be aligned with business strategy and pull in the same strategic direction. Deriving an Buy Operations management Books from a business strategy will not be an easy planning activity. During the translation from business to operations strategy, every one of the ambiguities and conflicts which are buried within most businesses strategies is going to be exposed and can must be resolved. Business strategies are painted in broad brushstrokes. They point the organization inside a general direction, but cannot show all the info; it is precisely what functional strategies are for. Operations strategy must take the typical thrust of business strategy and translate it into exactly what it method for the operation’s resources and operations. Put simply, is there a clear correspondence involving the business and your operations strategy? What this means is building a strong, logical and explicit link between every one of the activities in the operation and the business strategy where it operates. Besides this vertical logic from business to operations strategy, operations strategy also need to be coherent with itself and the strategies other functions pursue.
Outside-In: Operations must provide a position for that business in the markets
Operations may be the supplier to its markets. It will help establish and maintain its desired market position by offering the degrees and services information, innovation and cost that outclasses, or at least maintains with, competitors. The true secret question to inquire about ought to be, ‘how well do our operations profit the business compete in the markets?’ While straightforward, the hitch is the concepts, language and (to some degree) philosophy employed to help marketers understand markets are not invariably valuable in guiding operations. Consequently descriptions of market needs often need ‘translating’ before they can be useful to operations. The relationship between markets and the operations that serve them isn’t merely a matter of markets dictating how operations should behave. Customers will behave, a minimum of partly, how you (or your competitors) have treated them during the past. It is always a two-way street involving the markets and your operations.
Bottom-Up: Operations must get strategic advantage by gaining knowledge through daily experience
Not all decisions which may have long-term strategic importance come top-down from senior management. Important ideas can leave seemingly routine activities that happen within operations. A business can move around in a specific strategic direction because their on-going connection with serving customers within an operational level convinces them that it’s the right move to make, then this general consensus emerges, often in the operational amount of the organisation. Letting strategic ideas leave the operational amount of a company isn’t abdicating responsibility; it can be accepting that extraordinary ideas may come from those who just work at the sharp end. It will be a dereliction of duty if a person did not fit everything in simple to encourage plans from daily experience. Every action, every decision, every transaction manufactured by your operation’s processes, is an opportunity to include in existing knowledge.
Inside-Out: Operations must develop the strategic capabilities of the company’s resources and operations
The true secret question this is, ‘what can your operation make it happen your competitors can’t?’ Put simply, just how do one’s operations bring something unique on the business’ capabilities? For a lot of businesses, the solution is it can’t. But even though one’s operation doesn’t have a unique capabilities, it will a minimum of be striving to gain some type of advantage looking at the resources and operations. Thus, two further questions are relevant: what resources and operations ought to be causing building capabilities? And: how will be the decisions which are made inside the operation causing developing and supporting these capabilities? Try asking several questions in the so-called VRIO framework[i].
Are you experiencing valuable operations capabilities?
Are you experiencing rare operations capabilities?
Are you experiencing operations capabilities which are costly to imitate?
Do you think you’re organized to capture the value of operations capabilities?
The inside-out component of operations strategy should try and make certain that resources and operations are valuable, rare, inimitable, which the operation is organised to use them. Understand that each one of these situations are time dependent. A capability could be valuable now, but competition is not going to square still.
[i]In, Barney, J. B. (1995). Looking Inside for Competitive Advantage. Academy of Management Executive, Vol. 9, Issue 4, pp. 49-61
The author: Nigel Slack is Emeritus Professor of Operations Management and Strategy at Warwick Business School and the former head of the company’s Operations Management Group. He provides a consultant in many sectors, including Financial Services, Utilities, Retail, Professional Services, General Services, Aerospace, FMCG, and Engineering Manufacturing.
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